Lord Howell of Guildford: My Lords, the noble Lord, Lord Pearson of Rannoch, has certainly raised the temperature of the debate. I would say on his behalf that he is a reminder in the calm Chamber and calm wisdom of your Lordships’ House that outside, the temperature on this issue is rising—certainly at the more excitable end of the media—to boiling point. It is also worth commenting that so far in this debate—indeed, in the very facts that the noble Lord, Lord Boswell, set before us—there is now an assumption that Brexit, or leave, is a possibility. Indeed, the report addressed itself to how that possibility would unfold.
I was not in the excellent and learned team of the noble Lord, Lord Boswell. He has produced a very interesting report, which makes one think a great deal about these different possibilities, although there is one omission from the report, which I shall come to in a moment. I am not really surprised that, outside this House, in the wider world, the stay campaign is now on something of a back foot. You would have to be completely deaf not to hear the dismay and grumbles from many people—I suspect the majority in this country—who feel that this is the wrong debate about the wrong issues altogether. They believe that the renegotiation, which was attempted but has been somewhat forgotten, as the noble Lord, Lord Boswell, reminded us, was on the wrong basis and assumptions.
On the generality, although the big markets of the future are most probably in Asia, Africa and the Commonwealth, geography and history nevertheless keep us firmly in Europe. Every attempt to stand on  the sidelines or wash our hands of continental European development has always ended in disaster, as the Prime Minister pointed out. In Britain, we have always, in the end, been drawn in. So for us, the sidelines, as we should long ago have discovered and as we have discovered, just do not exist. Incidentally, we keep being told that countries such as Canada and Japan have a perfectly good access to the single market without being members of the European Union. I have looked in the history books and I cannot find any time when Canada or Japan were in Europe—we are, and that is the basic difference.
The referendum project and the negotiation project started from the right point. The first sentences of the Prime Minister’s Bloomberg speech of 23 January 2013 made it clear that the task was to be about the reform and future of the European Union to meet 21st century conditions, not just the reform of UK relations within it on a bilateral basis. But then something went wrong, and the debate lost its way. Experts crowded in to insist that all should be reduced to a sort of shopping list of British demands, and that was what the negotiations had to be about, and that the fundamentals—the pillar principles of EU architecture—should on no account be touched, because they were the ark of the covenant. So what should have been from the outset to be a European question—I believe the Prime Minister wanted it to be that way—became a British question, and an increasingly narrow one at that. For example, reputable think tanks such as the Centre for European Reform advised loudly that on no account should the Prime Minister even try to address or look at fundamental changes in the Union. Yet far from not touching on the fundamentals of the European model, it was always those basic features and principles that needed addressing and opening up. Why? Because the EU is a 20th century construct, rooted in and founded on 20th century concerns, which it addressed to great effect. But it is trying now to operate in a totally transformed world environment where big data and new platforms have completely revolutionised markets, business models and trade patterns, and are about to change much more—and, of course, where huge migrant flows have become a permanent feature, and will get much worse.
The digital and big data age invalidates all past precepts. There is simply no need for the doctrines of centralisation, integration and control in Europe; nor is this any longer the path to efficiency and innovation in our respective economies. With not only trade but actual production processes being globalised, the very concept of a single, tariff-protected goods market, as was designed in the 1970s, 1980s and 1990s, begins to melt away. Instead, the technologies cascading out from digitalisation permit and demand decentralisation, flexibility, differentiation and localisation. Those are the underpinnings of what should be the vision that the report has been looking at. The age of platform technology not only alters radically the relations between consumers and producers but places individuals—voters or the grass roots, call them what you like—in a completely different relationship to the governing authorities. The ground beneath the feet of the ruling  caste who created the EU hierarchy is being visibly washed away. We should be aware of that and should not shut our eyes to it.
My one criticism of the report is that it does not come to grips with this vital aspect of what is happening as opposed to what we think, from our various standpoints, ought to happen. Common sense, when it is allowed into the debate, confirms that neither of the extreme campaigning poles—the leavers’ nirvana of pure sovereignty and control snatched back from some embryo superstate, along with a magical insulation from migrant flows, versus the remainers’ happy and overcomplacent idyll of staying in the EU in its present form—is remotely available in the real and changing world or will ever be. The centrifugal powers of the information age, the ever-stronger restraining interdependence of all modern states, the absolutely unavoidable need for massive and continuous reciprocity and the spaghetti bowl of new types of trade and supply chains across the plant, which are now mostly in data and information form, will put paid to both those dreams. Big changes are certainly coming, but not the ones that either camp predicts, and we should surely be warned about that.
Whatever happens on 23 June, the time has come to analyse coolly the very fast- changing international order of things and put deep and serious intellectual effort into redesigning and preparing the European region—our region, whether we like it or not—for the torrent of changes from the wider world and the storms to come. Some, like the migrant flood, have already arrived. The global repositioning of Britain should be a central part of this story. Our relations not just with a changing EU but with America and the whole gigantic Commonwealth need revisiting. They are all relevant to the renegotiation approach. Meanwhile, we are being asked to travel on a wrong and fruitless route with the possibility of some very nasty shocks along the way immediately ahead. A still, small voice should be reminding us that as a nation we are making fools of ourselves instead of offering the best of ourselves, which could be very good indeed, when confronting the real issues and threats.
The debate now should be a negotiation—if that is the right word—about how Britain can help lead the European Union out of the trough and the time warp in which it has become entrapped. On the morning of 24 June, whether in or out has won, we will still find ourselves enveloped of necessity in a common purpose: to help reform and equip the European region in which we live for its survival in a totally transformed international milieu. It will be a context in which, with skilled statesmanship, bridges can be rebuilt between the bitter antagonists in this debate. Why? Because in today’s hyperconnected world all the countries of Europe, including Britain, are functionally inseparable. That is the reality that has to be faced or, to put it in more homely terms, the egg that cannot be unscrambled, Brexit or no Brexit. The EU today, troubled though it may be, is our village and our neighbourhood, but it is not our destiny. We should remain good neighbours but lift our vision to much higher challenges ahead.